Information on Buying Illinois Tax Lien Certificates and Earning High-Interest Fixed By State Law

Illinois is unique in that it holds two types of tax sales; Regular Illinois tax lien certificate sales and Scavenger tax sales.

Regular Tax Sales consist of properties which were delinquent the previous year. Bidding begins at 18% and Illinois tax liens are sold to the bidders willing to accept the lowest rate. The property owner has up to three years to exercise his or her right to redeem the property.

Scavenger Tax Sales consist of properties which were delinquent for two or more years. According to (Sec. 21-260 ) the 'minimum bid for any property shall be $250 or one-half of the tax if the total liability is less than $500.'

Tax Sale Type: Tax Lien Certificates (Sec. 21-240 )

Contact: Tax Collector (Sec. 21-110 )

Interest Rate: None

Penalty Rate: 18% (Sec. 21-215 )

Bid Procedure: Bid Down (Sec. 21-215 ) and the highest/greatest bid (for Scavenger tax sales) (Sec. 21-260 )

Redemption Period: Two (2) years or (3) years (Sec. 21-350 )

Law: Illinois Compiled Statutes, Chapter 35, Title 7, "Tax Collection" (35 ILCS 200/21-5 et seq.)

Additional Notes:

Penalty rate: The person at the sale offering to pay the amount due on each property for the least percentage shall be the purchaser of that property. No bid shall be accepted for a penalty exceeding the maximum of 18% (Sec. 21-215 ). For Regular Tax Sales, the penalty percentage is then computed through the date of redemption as a percentage of the certificate amount, as follows (Sec. 21-355 ):

Redeemed within 06 months - penalty bid at sale;
Redeemed within 12 months - two times the penalty interest rate bid;
Redeemed within 18 months - three times the penalty interest rate bid;
Redeemed within 24 months - four times the penalty interest rate bid;
Redeemed within 36 months - five times the penalty interest rate bid.

The person redeeming from Scavenger tax sales shall pay interest on that part of the amount for which the property was sold equal to or less than the full amount of delinquent taxes, special assessments, penalties, interest, and costs, included in the judgment and order of sale as follows:

(1) If redeemed within the first 2 months from the date of the sale, 3% per month upon the amount of taxes, special assessments, penalties, interest, and costs due for each of the first 2 months or fraction thereof. (2) If redeemed at any time between 2 and 6 months from the date of the sale, 12% of the amount of taxes, special assessments, penalties, interest, and costs due. (3) If redeemed at any time between 6 and 12 months from the date of the sale, 24% of the amount of taxes, special assessments, penalties, interest, and costs due. (4) If redeemed at any time between 12 and 18 months from the date of the sale, 36% of the amount of taxes, special assessments, penalties, interest, and costs due. (5) If redeemed at any time between 18 and 24 months from the date of the sale, 48% of the amount of taxes, special assessments, penalties, interest, and costs due. (6) If redeemed after 24 months from the date of sale, the 48% provided for the 24 months together with interest at 6% per annum thereafter on the amount of taxes, special assessments, penalties, interest and costs due (Sec. 21-260 ).

Important. According to (Sec. 21-260 ) 'The person redeeming shall not be required to pay any interest on any part of the amount for which the property was sold that exceeds the full amount of delinquent taxes, special assessments, penalties, interest, and costs included in the judgment and order of sale.' Basically, this means that anything over and above the minimum bid will not draw interest.

Redemption period: Generally, properties may be redeemed at any time before the expiration of 2 years from the date of sale, (Sec. 21-350 ). However, the owner of a tax lien certificate can extend the redemption to three years from the date of sale (Sec. 21-385 ).

Attaining a Tax Deed: At any time within 5 months but not less than 3 months prior to the expiration of the redemption period for property sold pursuant to judgment and order of sale under Sections 21-110 through 21-120 or 21-260 , the purchaser or his or her assignee may file a petition in the circuit court in the same proceeding in which the judgment and order of sale were entered, asking that the court direct county clerk to issue a tax deed if the property is not redeemed from the sale. The petition shall be accompanied by the statutory filing fee.

Notice of filing the petition and the date on which the petitioner intends to apply for an order on the petition that a deed be issued if the property is not redeemed shall be given to occupants, owners and persons interested in the property as part of the notice provided in Sections 22-10 through 22-25 , except that only one publication is required. The county clerk shall be notified of the filing of the petition and any person owning or interested in the property may, if he or she desires, appear in the proceeding.

You MUST record your Tax Deed: Unless the holder of the certificate purchased at any tax sale under this Code takes out the deed in the time provided by law, and records the same within one year from and after the time for redemption expires, the certificate or deed, and the sale on which it is based, shall, after the expiration of the one year period, be absolutely void with no right to reimbursement. If the holder of the certificate is prevented from obtaining a deed by injunction or order of any court, or by the refusal or inability of any court to act upon the application for a tax deed, or by the refusal of the clerk to execute the same deed, the time he or she is so prevented shall be excluded from computation of the one year period. Certificates of purchase and deeds executed by the clerk shall recite the qualifications required in this Section (Sec. 22-85 ).

 

Ask Your Questions About Illinois Tax Lien Certificates, Tax Deeds and Tax Foreclosures Below:

Below you will find a collection of the latest user questions and comments relating to Tax Lien Certificates Illinois.

Learn about Buying Tax Lien Certificates and Tax Foreclosures in Different Counties located in Illinois:

The following is a list of counties located in the state of Illinois. Tax Lien Certificates for properties located in the following counties are sold at Illinois county tax sales.

Learn about Buying Tax Lien Certificates and Tax Foreclosures in Different States Across The United States:

Learn more about each State's individual delinquent tax sale process for tax lien certificates, tax deeds and tax foreclosures by clicking on the name of the state for which you are interested from the list below:

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